Verari Systems confirms layoffs

Founder and CTO departs

Common Topics

Verari Systems - the boutique blade server maker that has been increasingly focusing on peddling its Forest containerized data centers - has confirmed the rumors that it laid off a large portion of its employees and is in the midst of restructuring itself.

In the wake of yesterday's story that discussed the rumors swirling around Verari, El Reg spoke to Dan Gatti, senior vice president of marketing at the company, who confirmed that the company has downsized. But he was adamant that Verari had not shut down.

"Our doors are not closed," said Gatti. "We are open. We are in the process of doing a restructure and we are working out the details to provide support, maintenance, and equipment to our customers."

When asked about the size of the layoff that Verari had, Gatti did not want to talk specifics, and when pressed, he would only say that "a good percentage" of the staff had been let go. He confirmed that the layoffs happened on the morning of December 11, as the rumors had been suggesting. The rumor mill, as we reported yesterday, had it that Verari had a peak of around 300 employees a few years back, but had slid to around 225 employees before the layoffs. The word on the street is all but a few dozen employees were furloughed.

Gatti also said that Dave Driggers, one of the co-founders of Verari and the firm's chief technology officer, was no longer employed by Verari. David Wright, who was brought in to Verari to be its chief executive officer in June 2006 and who replaced Driggers as chairman in June 2007 when the company got its third round of venture capital funding, is still working at Verari and with Gatti is working on the restructuring plan.

"We hope to have a solid plan in place in the next couple of weeks," Gatti said, and when asked about the possibility of asset sales, Gatti refused to comment other than to say that Verari had a number of different options. Having its assets and key personnel acquired by Appro International, Silicon Graphics, or Dell makes a certain amount of sense. Appro and SGI, which are in the supercomputer space and which lack containerized data centers, seem like reasonable options.

Speaking of SGI - which itself is what happens when fellow boutique rack server maker Rackable Systems eats the carcass of SGI with the IPO money Rackable stored up when times were good a few years back - Verari customers who are concerned about support can pay SGI's global services operation to maintain their gear. SGI says it already provides support to Verari customers in Europe, and it's extending its support to cover all Verari shops.

Verari may have had over 4,000 customers in its history, but according to Gatti, most of the money came from about 50 key accounts, including Microsoft, Sony, ESPN, Morgan Stanley, Akamai, Virgin America, Wachovia, Akamai, Qualcomm, Johns Hopkins, EMC, CGGVeritas, Petrobras, Harris, Lockheed Martin, and Northrop Grumman. ®